Tuesday, November 11, 2014

Ronan Johnson was 7 years old when he did his first volunteer work. As
an Indian Guide in Southern California, his troop collected cans of food and
worked at a homeless shelter. Although he was giving his time, he didn’t make
the connection that this was philanthropy or volunteering.

“That was just part of being
a Cub Scout. We probably got a badge. It was something you were supposed to do
at that age,” said Johnson, the now
35-year-old associate in the Indianapolis office of the law firm Taft
Stettinius & Hollister.

Since moving here after law
school, Johnson now gives his time to multiple organizations in the city.

“There are more opportunities
here in Indy than in other cities I’ve been in,” Johnson said. “Individuals are
willing to give up so much of their time, especially to organizations that they
care about and in many cases, they may not have a direct connection.”

Although at the upper end
of the millennial generation, which in the U.S. is approximately 80 million
people, Johnson shares many of its characteristics. The
2013 Millennial Impact Research Report, financed by the Washington, D.C.-based
Case Foundation, indicated that 72 percent of his generation are eager to
volunteer for a nonprofit organization, and a little over 50 percent would like
to give monthly to a charitable organization.

Despite a
willing talent pool, nonprofits have struggled to engage millennials in
meaningful ways. Johnson, however, is the exception. Currently, he serves on the Meals on
Wheels board, and is chair of the executive board of the
Young Lawyers Division of the Indianapolis Bar Association. He is also active
in the Penrod Society, the Association for Corporate Growth and completed the United
Way's Emerging Leaders program.

According to studies by Indianapolis-based Achieve, millennials want to engage
with causes to help people, not institutions. They prefer to get to know an
organization before committing to its cause and consider all their assets --
time and money -- as having equal value.

Johnson’s Meals on Wheels volunteer activity reflects
this.

“What got me involved
initially was someone asking me. But what’s kept me involved is the mission and
everything else. It was a cause that I strongly believed in and that I could
get behind. It’s something, regardless of board involvement or not, I would
have been involved with as a volunteer because we’re providing meals,
nutritious meals to the homebound,” he said.

Before joining Meals on Wheels,
Johnson invested time in United Way’s yearlong leadership program.

“What I actually got to understand
was the role that I was supposed to serve,” he said. “I was not just there to
be the executive director’s buddy and rubber stamp whatever the executive
director was doing.”

If nonprofits
are going to attract and keep volunteers from Johnson’s generation, which will
be 50 percent of the workforce by 2020, they must find new recruiting approaches.

In “The New
Breed: Understanding and Equipping the 21st Century Volunteer,”
recruiters are encouraged to start with a process similar to dating and
introduce individuals to an organization without a commitment. The authors
suggest an invitation to help assess a specific problem or fix a software issue
can be better starting places than asking for an ongoing volunteer commitment.

Given what Johnson
understands about his generation, he uses some of these skills to attract other
volunteers. One of those is the annual Get on Board event. For the past several
years, he’s volunteered at the event and has been surprised that the audience
is intergenerational, and sees it as an introduction to nonprofits. This year
more than 650 people attended the annual event.

“A lot of them are there
because they’ve been told that they need to get involved in the community. Personally
I don’t think that’s the strongest reason to want to be involved. If it ends up
causing them to do great things, all the better. Get on Board is a great way to
see what kind of options are out there,” said Johnson.

“It gets back to something I
mentioned earlier where I think that people don’t really know how it is they
want to get involved and what they want to do. And I think putting people in
front of the organization and giving them an experience with them first hand is
kind of like putting training wheels on it where it makes that first step easier,”
said Johnson.

To promote the event, his
committee reached out to law firms to distribute information, not only to associates
but to partners as well.

Connecting millennials to
organizations is exactly what he has tackled this year as chair of the Young
Lawyers Division of the Indianapolis Bar Association. During his tenure, the group
will offer four events designed to introduce nonprofits to millennials.

Johnson often hears people
talk about the idea of volunteering, but when he asks what they are doing,
their response is, “I’m looking for the right opportunity.”

“It’s a really daunting
first step. It can be a little bit intimating for a lot of people. Because
there are so many options out there. They’re not really sure what they want to
do and they are paralyzed by it,” he said.

What advice would he give
his generation?

“I
think it’s really amazing how much I grew and accomplished whenever I have been
behind a shared mission. Even when you don’t have a ton of money, moving
forward to accomplish those goals or whatever the goal is that you set forth, I
think it’s pretty amazing.”

Tuesday, November 4, 2014

We received a good response to our article last week about positive trends that local leaders are seeing in nonprofit
boards – clearer expectations, higher engagement, and more selectivity in
recruiting board members.

In 2010, some area executive directors and board chairs participated in
a study focused on nonprofit organizations with boards that succeeded in moving
“to the next level. “The study, by Mary
Hiland of Hiland Associates, yielded
some helpful guidance for organizational leaders, executive directors and board
chairs who desired to increase the performance of their boards.

Participants identified five finding themes for boards’ work:

1.Alignment: Right people doing the
right things with the right skills.

2.Individual growth: Assistance
for each board member to be the best he or she can be.

3.Team building: Fine tuning how the
group works as a team.

4.Maturity: The board’s ability
to understand the needs of the organization and its role as a collective group.

5.Asset creation: The collaborative
process by which boards reach full potential to lead and add value to the
organization in achievement of the mission.

The results reflected a continuum of board development, seemingly independent
of the operational life cycle:

1.Getting
the basics right.

2.Improving
overall board functioning; building board infrastructure.

3.Becoming
more strategic.

4.Attracting
investment, social capital (people and influence) and engaging with the
community in powerful ways.

Survey participants identified three critical success factors:

1.Outside governance expertise or
training. Essentially a “nudge” – from a facilitator or a board member
attending an external training both contributed to a new vision of the board.

2.The board chair’s role is critical
in creating or inhibiting movement and building momentum for change, in
partnership with the executive director. The board chair usually engaged a few
other board members, building a small group of champions for change.

3.Study participants described a
specific, articulated intention to develop the board: ”We were obsessed with
board development.” “Status quo was not OK.”

Tangible improvements occurred when there were changes in:

1.Identifying more people as leaders,
and leaders doing a better job in their roles.

2.Stronger relationships among the
board and executive resulted with better interpersonal dynamics.

3.Engagement resulted in increased
attendance and participation, better quality discussion and better preparation.
Additionally, there was more energy and momentum.

4.Board functioning resulted in better
meetings, more ownership of the board’s work, more effective committee work,
and recognition that the board needs to work on itself – not just the
organization.

5.When boards moved to a more
thoughtful, long view versus day-to-day supervision resulted in boards
fulfilling their roles.

6.Composition resulted in more diverse
and better “quality” of board members.

1. Personal: Check your calendar and get to the Board Chair Summit this
Friday morning, presented annually by Leadership Indianapolis. Whether you are
a current or future board leader, you will take away great insights and new
relationships.http://www.leadershipindianapolis.com/boardchairsummit.html

2. Organization: Start the year with a board self-assessment. You can use
many checklist tools available on the Internet or Charitable Advisors has
developed an on-line assessment tool that allows for anonymous feedback and
provides a PowerPoint report for your board to review and discuss. It also
includes a few opening questions that can be used to review the past year and
help prioritize your efforts for the new year.http://www.charitableadvisors.com/boardassessment.html

Bryan Orander is president of Charitable Advisors and publisher of the Not-for-profit
News. Charitable Advisors is a consulting practice based in Indianapolis that
focuses on expanding the capacity of area nonprofits. He started Charitable
Advisors in 2000 after more than 20 years of experience in leadership,
management and consulting.

Tuesday, October 28, 2014

By
Shannon McMorrow, interim director of Master of Public
Health, UIndy

Good
health. Unlike the majority of developed countries in the world, it’s not
considered an inalienable right guaranteed in the United States. However, at the very least, every American
should at least have a fighting chance to achieve it.

The reality is that there are disparities in
the U.S. on many levels: income, education and certainly health.

Many who work in the nonprofit world,
especially in social services, come face-to-face with these disparities on a daily
basis. Eliminating them is not an easy task as one disparity tends to feed upon
another.

Those who live in poverty -- some 48 million
Americans -- may have fewer opportunities for education. Those with little education may have fewer
opportunities to climb out of poverty. And both groups may be at a disadvantage
when it comes to accessing healthcare, healthy environments and making healthy
choices.

It’s the latter problem that a new master’s
program at the University of Indianapolis is trying to remedy. UIndy is the only university in the
Midwest to offer a Master of Public Health degree in health disparities.

The need to understand and address health disparities is
great – and growing.

One example: Indiana ranks 41st out of 50 states
for overall health and 44th
for the number of adults who smoke. According to the United Health
Foundation, 37.2 percent of Hoosiers who make less than $25,000 are smokers. As
income levels rise, the percentage of smokers falls. Only 14.5 percent of
Hoosiers with incomes greater than $75,000 smoke.

What might be the root causes of these facts? How can we
change these realities and root causes? This is part of the mission of UIndy’s
program, to analyze these questions, looking at the intersection of factors –
physical and social environments, social inequities based on gender and race,
genetics -- and implement programs and policies to improve health disparities.

Centered on the core public health values of community
collaboration and social justice, the program combines intensive professional
practice experiences with academic coursework preparation that includes current
public health knowledge in conjunction with community-based projects. The
applied public health curricula at UIndy will provide students with the ability
to understand and use evidence to positively have an impact on the community’s
health.

UIndy's MPH classes are predominantly online, with only
three of the core courses requiring an on-campus weekend. The program also
requires one week spent at the university during the first summer of the
student’s program. This hybrid format makes working and going to school a
reasonable option and prepare students for a
multitude of positions and careers in public health.

New MPH cohorts begin each fall. If you are interested in learning more
about the Master of Public Health at UIndy, please visit
uindy.edu/health-sciences/mph or call (317) 788-4909.

Shannon McMorrow, Ph.D., is the interim director of UIndy’s Master of Public Health program. She has more than 10 years of experience as a community health educator in diverse and multidisciplinary settings across the U.S., Belize and Uganda. Her doctoral studies centered on understanding the implications of media coverage of HIV/AIDS in Kenya for community health education practices.

There has been a dramatic shift in how nonprofits answered
that question in the past decade. A board’s impact has often been measured by
tangible participation – financial contributions and attending meetings.
Although these two factors are still important, it’s no longer enough.

Today board members must have a full understanding of a
nonprofit’s mission and be committed to it. They must be willing to share their
individual expertise to further advance that mission. They must be willing to
roll up their sleeves and move an organization forward.

“Particularly after the recession, if a nonprofit is going to survive,
its board has to be strong,” said Kim Donahue, director of agency services at
United Way of Central Indiana. From her vantage point, working with United Way
agencies and their partners, Donahue sees more boards operating at this higher level.

“There’s been a steady march toward being more efficient and effective.
It’s more than a glimmer of hope, it is a real trend,” said Donahue. “It’s kind
of odd to say, but sometimes crisis motivates the board like nothing else.”

Lena Hackett has also witnessed this shift. She is
founder and president of Indianapolis-based Community Solutions Inc. and her
consulting firm has been working with organizations, locally, regionally and
nationally for 14 years. Locally, she
attributes it to more training and recruiting the right people. In fact, she
has seen people turn down board positions after they thoughtfully considered
the commitment.

“I think for probably a decade, we were stuck on what a board should be
-- how many people should be on your board, and what kinds of people should be
on your board,” Hackett said. She tells boards to look for members who can help
move an organization’s agenda ahead, not just recruit prominent people.

One of the outcomes of these changes Hackett has seen is more nimble and
involved boards.

“I think organizations are less tolerate of board members who are not
active. You know they come to a board meeting, and hear reports and leave, and
don’t think about the organization again until the next time they come to a
board meeting,” she said.

Both Hackett’s and Donahue’s work with nonprofit boards is designed to
strengthen their effectiveness.

Donahue often begins her work by asking each board member to complete a simple assessment that evaluates their personal performance. After reviewing their responses, she facilitates a discussion to help board members understand how their performance affects their roles. Over the past 8 years, she has completed the process with 17 boards.

“I find that board members are very honest in assessment, partially
because it’s anonymous and partially because they know it’s a tool for them,”
said Donahue. Another tactic she thinks is important is for individual members
to annually sign an expectation contract, reviewing what it means to be a board
member.

Hackett starts her process with the results the board wants to achieve.

“We do individual board interviews and have people identify where they
feel they have spheres of influence -- where they have ability to have impact,
influence or leverage. We work with a board on action accountability,” she
said.

After the board decides on an action or goal, each member is asked to
put their commitment in writing and give it to the board chair or executive
director. The next meeting starts with a progress report sharing personal
actions. In Hackett’s results’ model, board members hold each other
accountable.

As part of her firm’s process, after working with a nonprofit, they stay
connected in a coaching role for up to 90 days.

“Our experience is that change is easier for people to do on paper, but
once they start to implement it, it gets very hard. So to have a coach there at
a board meeting, and in between, coaching them on issues that come up, is just
key to what we do,” said Hackett.

Another significant change that Donahue has seen is the elimination of
nominating committees. Boards opt instead for a governance committee, which has
broader responsibilities and includes board education and recruiting community
members for committees. Often, they find the latter develops a pipeline of
future board members. By involving non-board members on committees, community
members get a chance to learn about the nonprofit, and in turn the board gets a
chance to see who’s really engaged and a worker bee.

“Being able to recruit from committees is a great thing. It happens more
often in larger nonprofits than it does in smaller nonprofits, but even the
smaller are starting to adopt it,” said Donahue.

Boards are also encouraged to scout for future talent outside their
immediate circles.

“How many times have you heard a nonprofit say, ‘It’s a well kept
secret.’ If you keep recruiting from the same circle, you will remain a
well-kept secret,” said Donahue. She recommends events like Get on Board
because it widens the pool and immediate sphere. Some nonprofits have had informal
meet-and-greets for people who are interested in board membership.

Hackett sees the relationship between board and an organization unique
and recommends potential board members go to a meeting and see the personal
interactions.

“I consider a board relationship with an organization a fairly intimate
relationship. If you’re just looking to get on a board, be discerning a little
bit because it’s a lot of work. See how the chemistry feels,” she said.

Donahue believes in real work for the board, and has additional
recommendations for on-going engagement.

“At every board meeting, some part of strategic plan should be
discussed. It doesn’t have to be the whole plan. Review one of the goals on the
plan and ask: How are we doing on this? Do we need to adjust the deadlines.”
Additionally talking about future directions or the organization’s vision is
also empowering.

“We trap them in the here and now, always bantering them to raise money,
badger them for this and that,” Donahue said. “Give them an opportunity to look
at the future: What do we see happening in the next three to five years? What
could this become? What do we need to do to get there?”

Donahue said one phrase that sticks in her head. “Boards are the keepers
of quality.”

*****

TIPS for improving board members’ experience

Provide new members with a packet that clearly
outlines roles and responsibilities.

Remember that often a new board member feels
like they walked into the middle of a conversation. Provide them with a year’s of
board minutes.

Give them information early and often.

Help them understand the differences in the
for-profit and nonprofit sectors. One good tool is Jim Collins’ “Good to Great
in Social Sectors,” a small monograph.

Remember that a terrific board cannot make up
for a weak CEO. It’s the board’s responsibility to hire the best possible CEO
and evaluate him or her regularly.

Tuesday, October 21, 2014

Editor’s
note: Last October, the IRS issued its final regulations regarding the rules
for deduction versus capitalization of tangible property. These final
regulations clarify the previous regulations under IRC Sections 162 (a) and 263
(a) and affect all taxpayers who acquire, produce or improve tangible property.
The following is a reprint of an article that appeared on BKD’s website in
March.

By
Robert Conner, national tax assistant director, BKD

The IRS recently issued final “repair” regulations
clarifying when tangible property expenditures may be deducted instead of
capitalized for tax purposes. For tax years beginning on or after January 1,
2014, exempt organizations with unrelated business income (UBI) or taxable
subsidiaries should look to these new rules to determine the proper tax
treatment of expenditures related to tangible property acquisitions,
improvements, repair and maintenance activities.

One of the provisions most favorable to taxpayers in the
repair regulations is the new de minimis safe harbor, which allows companies to
deduct tangible property expenditures falling below their financial statement
capitalization policy threshold. To qualify for the safe harbor election, an
organization must have an accounting policy in place on the first day of the
applicable tax year that calls for expensing amounts paid for property less
than a specified amount. If such requirements are satisfied, the otherwise
capital acquisition cost of tangible property subject to the policy may be
currently expensed for tax purposes.

For taxpayers with applicable financial statements—generally
an audited financial statement—the policy can be as high as $5,000 per invoice
or item and must be in writing as of the beginning of the tax year. For all
other taxpayers, the amount is $500 or less per invoice or item, and the policy
is not required to be in writing.

Exempt organizations with UBI or taxable subsidiaries should
review applicable expensing policies in light of the new de minimis safe harbor
to determine if the expensing thresholds are appropriate. If your organization
does not currently have a written capitalization policy, consider
adopting a policy prior to the start of your next fiscal year. The regulations
do not require board-level approval to adopt or change a written capitalization
policy. However, organizations considering a change should consult their tax
advisor and external auditor (if applicable) to reconcile any competing tax and
nontax considerations.

To learn more about how the repair regulations may apply to
your organization, or for help formalizing a capitalization policy that makes
sense for your organization, contact your BKD advisor.

Robert Conner serves as a national tax
assistant director BKD’s national office in Springfield, MO. He performs
tax consultations and quality control reviews with the firm’s offices. He has
worked as a tax advisor since 2005, graduating from Illinois State University

Tuesday, October 14, 2014

Goodnonprofit organizations seek out
community leaders from diverse backgrounds to serve on their boards of
directors. As they recruit directors, they know that having the right people
with the right skills helps the organization achieve its strategic goals.

Nonprofits are tapping lawyers not only for their legal
expertise, but also for their personal networks and reputation. With increased regulatory focus and challenges in nonprofit
governance, business transactions and donations have taken on a new complexity
that can benefit from a legal perspective.

Having a lawyer on board can be good for both sides: nonprofits receive
the benefit of legal counsel, while lawyers get to support a cause they are
likely passionate about, and connects them to other community leaders outside
the legal circle. This opportunity is not lost on new lawyers who are
encouraged by their firms to invest time volunteering in the community.

One nonprofit recently avoided a massive wage claim
liability when it laid off several employees. The lawyer on board was able to
help ensure banked vacation days were paid. Otherwise, the nonprofit and its
board and officers could have faced triple damages and attorney fees awards for
the nonpayment of wages.

Three primary benefits of bringing
a lawyer on a nonprofit board:

·Receive
general legal knowledge. By virtue of their training,
lawyers are analytical thinkers. They are steeped in the basics of law,
including contracts, lawsuits, liability and liability insurance, as well as
issues concerning employment,
immigration, health care and government regulations.
Lawyers on board draw from this knowledge while serving and can help make
business and programming decisions.

·Have
help making the tough decision(s). Because of their
training and experience, many lawyers can identify problems early. They can
also help problem solve and mediate myriad interests among the board and
stakeholders of the nonprofit.

§Make
connections. Most successful lawyers have many
community connections. These may include grant-making organizations, community
activists, politicians, business leaders, school leaders, accountants and other
lawyers. Connecting the organization and its staff with some of these contacts
is par for the course of serving on a board. Nonprofits can leverage the
lawyer’s relationships to build a bigger network and increase their donor
base.

Despite these
advantages, there are three cautions to consider:

·Ensure
subject-matter knowledge. Lawyers are required to be
“competent” in a field or subject of law before providing legal services in
that field. Out of a desire to help, many lawyers may attempt to answer
questions outside of their competency or knowledge. Today’s nonprofits require
professional advice specific to the nonprofit sector and the board members
should be prepared to acknowledge this and seek outside and independent legal
counsel where appropriate.

§Properly
manage conflicts. In addition to the typical conflicts
that arise in the nonprofit sector (i.e. private benefit), Rules of
Professional Conduct control many situations that happen when a lawyer’s
representation of one client adversely affects his representation of another or
his personal interests. For example, the lawyer may be asked to formulate an
opinion on the appropriateness of a board decision in which the lawyer
participated, making the lawyer a defendant or key witness and therefore
ineligible to make such an opinion.

§Protect the attorney-client privilege. It can be difficult to delineate exactly when the
attorney-client relationship begins, especially when dealing with a lawyer on
board. Additionally, if the lawyer does not make it clear that he or she is
wearing only the “lawyer” hat when
giving legal advice in the boardroom, then conversations with that lawyer-board
member may not be privileged.

Having a lawyer on board can come with great benefits, both to the
lawyer and the organization, and also comes with some risks to both. But when
the risks are properly managed, the lawyer’s service can be positive and
fruitful.

Attorney Zac Kester provides generalist and strategic
nonprofit legal and consulting services. He holds a Master of Law, a post-law
school advanced degree, in which he studied the unique needs of tax-exempt
nonprofit organizations. His legal and consulting career has focused on
nonprofit organizations.Contact
Zac
Kester, executive director, at 317-429-1649 or zkester@charitableallies.org
with any questions.